Turkish Parliament passes law bringing new regulations to current tax system

The law proposal, including regulations such as Digital Service Tax, Accommodation Tax, Valuable Housing Tax, and the addition of new tranches and rates to the income tax tariff was accepted at the TGNA General Assembly.

Accordingly, advertisments, music, video, and game sales on the internet will be subject to Digital Service Tax. The Digital Service Tax rate will be 7.5 percent. International technology companies like Google and Facebook will pay 5.5 percent tax for their revenues in Turkey exceeding TL 20 million.

ACCOMMODATION TAX

This law introduces a new tax called “Accommodation Tax”.

Accommodation facilities such as hotel, motel, holiday village, pension, apart hotel, guest house and camping facilities and rural tourism facilities such as mountain and plateau houses will be subject to accommodation tax. Accommodation and all services related to accommodation will be taxed. Accommodation Tax, which will take effect from the 4th month of next year, will be applied as 1 percent until the end of 2020 and then as 2 percent.

INCOME TAX

With this law, a new tranche will be added to the income tax tariff and the upper tranche will be increased from 35 per cent to 40 per cent. Thus, those who earn TL 500 thousand and over will pay 40 percent income tax.

The first 4 tranches of the current tariff will be the same and no change will be made in the tax burden of the groups that earn up to TL 500 thousand.

The income tax deduction rate applied to sportsmen active in the top leagues in the sports branches subject to the league procedure will be increased from 15 percent to 20 percent. The tax increase will be available for new contracts.

Some tax exemptions have also been removed. Income tax exemption of sports referees was terminated. The tax cut from athletes playing in the top leagues was increased from 15 percent to 20 percent.

VALUABLE HOUSE TAX

House owners with houses worth over TL 5 million will be subject to tax ranging from 0.3 percent to 1 percent. These houses will be determined by the General Directorate of Land Registry and Cadastre. House owners will be able to appeal the determined value.